2 Financial Engines and Aon Hewitt, “Help in Defined Contribution Plans: 2006 Through 2010,” September 2011. “Help” in this research is defined as target-date funds, managed accounts, and online advice.

3 Outcomes are not guaranteed.

4 For illustrative purposes only. The definition of “low cost” is based on Schwab’s research using (1) 2010 data from 195 defined contribution plans serviced by Schwab Retirement Plan Services, Inc. and Schwab Retirement Plan Services Company, and (2) 2010 data from a comparison set of plans serviced by other providers. In this comparison set, the weighted average operating expense ratio (OER) for midsize plans ($20 million–$100 million) using actively managed funds was $55 to $95 per $10,000 invested, and for large plans ($100 million–$350 million) the OER was $50 to $75 per $10,000 invested. For similar-sized plans adopting Schwab Index Advantage, the weighted average OER for index mutual funds or exchange traded funds could be about $15 to $20 per $10,000 invested. This example does not include any fees associated with professional, independent advice services or other fees that may be charged to a participant account.

5 Schwab Retirement Planner® provides participants with a retirement savings and investment strategy, a major component of which is a discretionary investment management service furnished by independent registered investment advisors GuidedChoice Asset Management, Inc. (“GuidedChoice®”) or Morningstar Associates, LLC, a wholly owned subsidiary of Morningstar Inc. Using investment alternatives available in the plan, GuidedChoice creates discretionary managed portfolios based on modern portfolio theory, and Morningstar Associates creates discretionary managed portfolios based on human capital methodology. These investment alternatives have been selected by an appropriate plan fiduciary specifically for use in the managed account. Other investment options may be available in the core lineup that are not included in the managed account. For a complete list of the investments that are available under your plan, visit schwab.com/workplace, click on Statements and Reports, and view the last annual Fee and Investment Notice and any subsequent Change Notices. GuidedChoice and Morningstar Associates are not affiliated with or agents of Schwab Retirement Plan Services, Inc. (“SRPS”), Charles Schwab & Co., Inc. (“CS&Co.”), a federally registered investment advisor, or their affiliates. Neither CS&Co., SRPS, nor their affiliates supervise, make recommendations with respect to, or take responsibility for monitoring the services provided to participants by GuidedChoice or Morningstar Associates. Schwab Advice Consultants, who are not employees of GuidedChoice or Morningstar Associates, facilitate participant access to the GuidedChoice or Morningstar Associates services, but do not provide investment advice or recommendations regarding the GuidedChoice or Morningstar Associates services or generally as part of Schwab Retirement Planner. Use of the term “personalized” in the context of the Schwab Retirement Planner service (“service”) refers to the savings and investment recommendations made by GuidedChoice or Morningstar Associates and personal data that may be provided by the participant which will form the basis for GuidedChoice’s or Morningstar Associates’ allocation of the participant's account assets in one of the discretionary managed portfolios and will result in a savings recommendation within the plan and outside the plan. For plans that do not include a salary-deferral feature, this fee-based service does not include a savings recommendation within the plan; references to savings strategy, savings recommendation, and annual savings adjustments are not applicable to these plans. My Retirement Progress™ services are also not provided for plans that do not include a salary-deferral feature. Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market. Plan sponsors may select either investment advisor to provide the managed account service within Schwab Retirement Planner. There is no guarantee a participant’s savings and investment strategy will provide adequate income at or through his or her retirement. Fees are charged for Schwab Retirement Planner, including its discretionary investment management service, based on the participant’s account balance. Participants should carefully consider information contained in the materials furnished at their employer’s direction regarding the services provided by SRPS and its affiliates, Morningstar Associates, or GuidedChoice, including information regarding compensation, affiliations, and potential conflicts.

Fund operating expenses lowered by up to 87%
Results are for the initial 47 Schwab Index Advantage plans as of 9/30/2013. There are differences in the retirement plan features and services provided through Schwab Retirement Plan Services, Inc. for plans electing Schwab Index Advantage and plans not electing Schwab Index Advantage, including funds available under the core investment menu, capital preservation vehicle, and third-party advice features. Weighted average operating expense ratio (OER) for the initial plans at Schwab before adopting Schwab Index Advantage (62.04 bps) is calculated using actual results from each plan’s core investment menu before the transition to Schwab Index Advantage and does not include assets in self-directed brokerage accounts or PCRA* and frozen investment funds. The OER for these plans after adopting Schwab Index Advantage (15.44 bps) is calculated using the core investment menu of each plan transitioned to Schwab Index Advantage as of 9/30/2013 and does not include assets in Schwab Bank Savings, PCRA,* and frozen investment funds including stable-value fund balances. The core investment menu available to plans serviced by Schwab Retirement Plan Services, Inc. under Schwab Index Advantage differs from that available to plans serviced by Schwab Retirement Plan Services, Inc. outside of Schwab Index Advantage.

Nearly $115,000 more at retirement
Hypothetical assumptions for illustrative purposes only supporting an additional ~$115,000 to a 401(k) participant’s retirement savings: annual market growth, 7.5%; initial contribution rate (year 1), 5%; increase in contribution rate (years 2–6), 1%; ongoing contribution rate (post–year 6), 10%; industry standard employer match, $0.50 per $1 for the first 6% of income contributed; beginning salary, $50,000; yearly salary increase, 3%; starting age, 25; age at first year of distributions, 55; percentage of last salary distributed annually, 50%. Approximate difference of $115,000 represents the additional account balance resulting from an investment allocation comprising index mutual funds with a weighted OER of 20 basis points versus an investment allocation comprising actively managed mutual funds with a higher weighted OER of 86 basis points. The 86-basis-point assumption is based on Cerulli analysis of midsize 401(k) plans. Assumptions do not factor in the potential impact of professional, independent advice services or any fees that may be associated with these services or other fees that may be charged to a participant account.

70% more wealth
Financial Engines/Aon Hewitt study: “Help in Defined Contribution Plans: 2006 Through 2010,” September 2011. According to the study, participants in 401(k)s that received professional “Help,” on average, experienced returns nearly 3% (292 basis points) per year higher than participants who did not receive such “Help.” For example, suppose that two participants, one using “Help” and one not using “Help,” each invest $10,000 at age 45. Using the return difference of 292 basis points, the “Help” Participant could have 70% more wealth at age 65 ($71,400) than the “Non-Help” Participant ($42,100). For purposes of the study, “Help” is defined as professional investment help, under the study meaning target-date funds, managed accounts, and online advice, including fee-based and non-fee-based advice. All returns reported in this study are net of fees, including fund-specific management and expense fees, and managed account fees where applicable. Results not guaranteed.

84% of SIA participants have remained in professional advice
Schwab Retirement Plan Services, Inc. internal data as of 9/30/2013. Eighty-four percent of participants in plans using Schwab Index Advantage® remained subscribed to its advice service after being automatically enrolled in it. Advice offered through Schwab Index Advantage is a built-in feature that plan participants must opt out of in order to decline it. Most other advice offerings require participants to opt in to the feature.